Donald Trump is discussing tariffs as a revenue source as well as a form of protectionism. It seems to me, based on almost nothing, that he might have something here. Before the U.S. embarked on the great Prohibition Experiment, the majority of federal revenue came from tariffs and imposts, largely on alcohol. Prohibition couldn't have happened, in those fiscally saner days, without the Income Tax as authorized by the 16th Amendment of 1913. After WWII, before successive Administrations of both parties became hell-bent on forcing free trade on the world, I believe about 50% of federal revenue came from tariffs. When that revenue went away, income taxes failed to replace it. I don't know. I'd love to hear from anyone who actually knows about this stuff and I don't mind being corrected.
As I understand it, the complication is that it is typical these days for manufacturing to be spread across countries. For example, car manufacture might involve parts coming from different countries. I think there are some other similar examples involving areas of expertise in different countries.
This was before we had the global economy we have today. Tariffs on luxury goods and/or for protectionism is very different that on essential goods, which is what we see today. The US tried Tariffs on many essential in the 1920’s and that led, in part, to the great depression. I see no evidence this will lower the price of eggs. I am starting to think Trump lied.
Tariffs greatly exacerbated the severity of the Great Depression: https://en.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act Moreover, the US federal government before the Progressive Era was much more constrained (and thus affordable) than it was afterwards. Entitlement programs that today are 3/5 of the federal budget didn't exist then, nor did massive defense expenditures that today are 15% of the federal budget. As for "forcing free trade on the world", you can phrase it as negatively as you want, but freer trade has contributed to billions-with-a-b people being much better off than they would have been in economic silos. And that's one of the few things that economists all over the map agree on.
Yes, that's what we're told. What no one ever points out, though, is that the Crash and ensuing deflation happened before Smoot Hawley. Similarly, the 2007 financial crisis happened at a time of an extreme free trade environment. I don't doubt anything you posted about the benefits but I DO ask, "At what price?" A global race to the bottom for financial regulation and its attendent high risk of collapse seems to have been one part of that price.
Technology has made the world so small, trade simply has to be as free as possible. Targeted tariffs can make sense--like fighting Japan's steel-dumping at one time--but generally they're just taxes on Americans.
And that's what we're told although according to Rabbi Wiki, Smoot Hawley actually seemed to work at first but it was too late.
I'd rather listen to economists, especially when this is one of those rare issues on which they all agree.
